The government has decided not to extend the February 1 deadline for implementation of revised FDI (foreign direct investment) norms for the country’s fast upcoming e-commerce sector. In an official notification on Thursday, the Department of Industrial Policy and Promotion said the decision was taken after “due consideration”.
According to media reports, two of India’s largest e-commerce firms, Amazon and Walmart-owned Flipkart, have lobbied intensely to get an extension.
The new e-commerce norms ban companies from striking deals with sellers to sell products exclusively on their platforms. Also, e-commerce firms are now barred from selling products through firms in which they hold an equity stake.
The new norms are a blow to both Walmart, which entered the country last year by investing $16 billion for a 77% stake in Flipkart, and Amazon, which has invested over $5.5 billion in the country over the last five years, as they will now have to change their business structures and reconsider strategies for entities in which they have a stake.